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HB 1696

Public Contracts - As introduced, requires a state department, agency, or official who contracts with a business to acquire property or services to make payments under the contract to the business within 30 days rather than 45 days after receipt of the invoice from the business; requires such state departments, agencies, and officials to annually report to the chairs of the appropriate standing committees of the senate and house of representatives by January 10 of each year the number and aggregate amount of late payments made for the preceding calendar year and the amount of interest paid and outstanding on such late payments. - Amends TCA Title 12, Chapter 4.

114th Regular Session (2025-2026) Introduced by Jake McCalmon

Tennessee bill shortens state vendor payment deadline from 45 to 30 days and mandates annual late-payment reporting to legislators for accountability.

Comp. SB subst.
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Bill Summary · HB 1696

Legislative bill overview

HB 1696 accelerates state payment timelines for vendor invoices from 45 days to 30 days and requires annual reporting of late payments, interest charges, and outstanding balances to legislative committees. This applies to all Tennessee state departments, agencies, and officials purchasing property or services through contracts.

Why is this important

Faster payment cycles reduce cash flow burdens on small businesses and vendors who contract with the state, potentially lowering their borrowing costs and improving operational stability. Transparency reporting creates accountability for payment performance and reveals the actual cost of state payment delays through interest calculations.

Potential points of contention

  • State cash flow impact: Accelerating payments by 15 days increases state treasury demands and may strain budgets during fiscal constraints or require agencies to adjust spending priorities
  • Implementation feasibility: Agencies may lack administrative capacity to process, verify, and pay invoices faster without system upgrades or additional staff, creating compliance challenges
  • Incomplete cost analysis: The bill doesn't specify whether the 30-day clock starts from invoice receipt, delivery of goods/services, or approval—ambiguity that could create disputes and enforcement difficulties

Compiled from official sources — confirm details with the bill’s official record.

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